US STOCKS-Wall St rises with Bernanke relief, consumer shares

* Relief after Bernanke questioning

* Home builders, retailers gain

* Dow up 2.1 pct, S&P up 2.1 pct, Nasdaq up 2.1 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates to close)

By Caroline Valetkevitch

NEW YORK, June 25 (Reuters) - U.S. stocks rallied on Thursday as investors were relieved that Ben Bernanke withstood congressional questioning without problems.

Retailers and home builders led stocks higher for much of the session, helped by a suprising profit increase from retailer Bed Bath & Beyond Inc (BBBY.O)

Stocks extended gains shortly before midday as investors took Bernanke's hearing in stride.

The U.S. House of Representatives Oversight and Government Reform Committee questioned Bernanke on the Fed's role in Bank of America's takeover of Merrill Lynch, and whether he pressured BofA's CEO Ken Lewis to go through with the deal after Lewis raised objections. For details see [ID:nN25267831]

"There was concern as to what might happen there. He seemed to give some pretty decent testimony; at least it didn't get out of hand," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama.

The Dow Jones industrial average .DJI was up 172.54 points, or 2.08 percent, at 8,472.40. The Standard & Poor's 500 Index .SPX was up 19.32 points, or 2.14 percent, at 920.26. The Nasdaq Composite Index .IXIC was up 37.20 points, or 2.08 percent, at 1,829.54.

The Dow snapped a four-day losing streak.

Also boosting the market was home builder Lennar Corp (LEN.N), which posted a wider quarterly loss, but noted an increase in new home sales and orders. Its stock shot up 17.5 percent to $9.19. [ID:nBNG21059]

The Dow Jones U.S. home construction index .DJUSHB jumped 5.9 percent.

Gains in home builders and retailers point to signs of strength in consumer spending, which could be a boon for stocks just as the second-quarter earnings reporting period gets under way.